Last year, as we prepared to launch our new strategy Building a Better Future, we drew on lessons from the last five years to inform our future approach. We distilled this learning into eight key lessons that reflected changes we made that worked well and those that didn’t.

Most significant were changes made to our ways of working that were at first a reaction to two global events in the last five year: the Covid pandemic and the renewed focus on the Black Lives Matter movement. The combined impact of these meant that – like many others in our sector – in order to continue to effectively serve charities and wider communities, we needed to adapt quickly. In making these rapid changes, we exposed practices we’d been using that did not serve charities as well as we’d hoped. For example, in reviewing a sample of our grant portfolio we learned that our grant processes led to fewer charities led by and for Black, Asian and minority ethnic communities being awarded funding.

One of our key lessons, and one which underpins many of them, is to listen actively. Those working within the philanthropic sector can often be far removed from the communities they seek to support. It is essential to really listen to honest opinions, even more so when it’s hard to hear. Our grant monitoring requirements focus on gathering insights from the experiences of frontline charities instead of asking them to monitor and account how their grant has been spent and the outcomes they achieved as a result. This approach has led to a trusting relationship with charities and given us the confidence to adopt lighter touch processes while remaining robust. But more than that, it’s provided us with useful insight on the challenges charities face, the experiences of the people they support and the many ways in which they help to transform people’s lives.

By ditching the vast amounts of quantitative data, we found the process of analysing these reports was much more manageable for our staff and we only had the qualitative data that helped us to build a much better picture of what’s going on and in turn improve our approaches effectively and efficiently.

Even so, during the pandemic we soon found that we needed to find alternative approaches to get information faster as the external environment was changing at speed. We did this by capturing the regular conversations that our regional managers would have with charities and sharing them internally. We also piloted an approach to monitoring, based on conversations instead of charities needing to complete written reports.

These changes we made, and the benefits gained from them were apparent to the charities as shown in our 2021 anonymous feedback survey. Seventy-five per cent of charities said they understood their organisation and its aims very well against a sector benchmark for this is 54 per cent.

The most noticeable change in our practice has been in who we fund. We launched our equity, diversity and inclusion strategy in 2019. We began this work by reviewing our funding portfolio where we found that charities led by and for Black, Asian and minority ethnic communities had lower success rates than white-led charities when applying for our funding. The impact the pandemic had on minoritized communities and the Black Lives Matter movement accelerated the need for us to address the disproportionality in our portfolio. The biggest lesson for us in this work was the need to move quickly and not be afraid of opening ourselves up to challenge. Indeed, in doing so we could also learn quickly and make iterative changes to funding programmes in real time that may not have been as fruitful had we waited to perfect our approach before launching publicly.

Over the last five years, particularly as a result of the pandemic, we had to make some difficult decisions. As a corporate funder, our income is based on the profitability of our funder. Due to the uncertainty of our financial position, we had to prioritise what we spent our income on, acknowledging that we would not be able to fund as many organisations as we had in previous years. This was of course disappointing to many charities who could have benefitted from our support and never more so than during the pandemic when they faced an uncertain financial future amidst rising demand.

As part of our learning, we have openly acknowledged our trade-offs with charities, making clear how many we would be able to fund, what we couldn’t fund and why. We know that many worthy charities spend large amounts of time and resources in applying for funding only to be met with disappointment. To address this we made changes focused on reducing the time charities spent in applying to us and turning charities down earlier so they weren’t made to wait longer for a decision.

By sharing what we had done, the mistakes we made and the success we had we want to learn from others, open up to challenges, and encourage others to think through their own practice and share their own lessons. We are much stronger when we collaborate, learn from each other and challenge one another, and those we seek to serve will benefit from it.

Paul Streets is Chief Executive at Lloyds Bank Foundation.